GREY:MGXMF - Post by User
Comment by
HonestAbeon Nov 23, 2017 4:29pm
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Post# 27021867
RE:Re: Case Lake
RE:Re: Case LakeThe stock has traded mostly in a tight range around $1 +/- 5c for the past several weeks, essentially unchanged. IMHO the market is either grossly misunderstanding or misinterpreting or undervaluing XMG's situation.
Look at what happened this month already. Their partner PurLucid received c$8.2m in grants (i.e. free no strings attached money) that is essentially worth 10c per share. Their JV partner PWM rose from 30c range to over 80c today for a market cap now exceeding c$65m. XMG owns 20% of PWM's existing spodumene assets, an option to acquire additional 15% more for $10m payment, plus an option to buy 10m PWM shares at 65c.
You could argue that 20% ownership is worth $13m (based on market cap) and the 10m call option is currently $1.5m in money, and the 15% extra for $10m cash is break-even at 80c (but worth something above this number or if NAV of a hard rock asset has higher implied value). The PWM stuff is now essentially valued at 18c per share.
So just in the past month two significant value creating news has theoretically added a whopping 28c in implied tangible share value to XMG, yet the stock has only moved 5c from a 95c base to a $1 base??!! Totally crazy irrational market mispricing IMHO!
What likely occurs is some news gets issued which forces certain analysts, newsletter touters, or big money managers to suddenly have the cha-ching light bulb go off in their head and the stock explodes violently upwards towards a more fair valuation in the $2 or $3+ range. All you need for this theoretical exercise is to observe trading action of ISOL that acquired a $20m annual revenue generating company earlier in the spring in cannabis space, yet the stock traded between absurdly low 25c to 35c ($50m to $70m market cap) range for over 6 months. Suddenly earlier this month it exploded from 25c to a high of $1.23 in just 3 weeks!